What Employers and HR Professionals Need to Know about the American Rescue Plan Act

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Attorneys & Professionals

On March 10, 2021, Congress passed the American Rescue Plan Act of 2021 (ARPA or the Act).  President Biden signed the bill into law on March 11, 2021.  ARPA provides $1.9 trillion in relief to employers, individuals, and state and local governments related to the COVID-19 pandemic.  Following is a brief review of the employment-related provisions included in the Act:

Unemployment Compensation Provisions

ARPA extends certain unemployment benefits previously granted under the March 2020 CARES Act (CARES Act) and the December 2020 Consolidated Appropriations Act (CAA).  Previously, under the Cares Act and CAA, Congress created and then extended three programs of new and/or expanded unemployment benefits:  (1) Federal Pandemic Unemployment Compensation (FPUC), which provided an additional $300 weekly unemployment benefit; (2) Pandemic Emergency Unemployment Compensation (PEUC), which provided 24 additional weeks of unemployment benefits for those who had exhausted state unemployment benefits; and (3) Pandemic Unemployment Assistance (PUA), which provided federally-funded benefits for workers who would not normally be eligible for state unemployment compensation (e.g., independent contractors and self-employed workers).  Absent the extensions provided by ARPA, these programs were set to expire on March 14, 2021.

ARPA extends and revises FPUC, PEUC, and PUA through September 6, 2021, as follows:

These programs are fully funded by the federal government.  Thus, even though ARPA has extended them through September 6, 2021, employers will still not be responsible for this cost.

Extension of FFCRA Tax Credit

The Families First Coronavirus Response Act (FFCRA) required employers with fewer than 500 employees to provide Emergency Paid Sick Leave (EPSL) and Emergency Family Medical Leave (EFML) for certain COVID-related reasons through December 31, 2020, and established corresponding tax credits to reimburse employers for such paid leave.  The leave mandate expired on December 31, 2020.  In December 2020, the CAA extended the tax credits through March 31, 2021 for employers covered by the FFCRA who voluntarily continued to provide FFCRA leave to employees. 

ARPA now extends those tax credits through September 30, 2021 for employers covered by the FFCRA who voluntarily continue to provide FFCRA leave through that date.  Like CAA, ARPA does not extend the leave mandate beyond December 31, 2020.

FFCRA Revisions

ARPA also made the following modifications to the FFCRA, effective April 1, 2021:

ARPA directs the U.S. Department of Labor to issue guidance or regulations regarding these ARPA changes, so additional information and clarification regarding these changes should be forthcoming.   Employers are reminded that the extension of these expanded FFCRA eligibility opportunities are no longer mandatory.  ARPA simply extends the opportunity for tax credits as reimbursement for employers who elect to provide such paid leave benefits.

Vorys COVID-19 Task Force

Vorys is continuing to monitor developments in this area and will continue to provide updates.  We have also established a comprehensive Coronavirus Task Force, which includes attorneys with deep experience in the niche disciplines in which we have been and expect to continue receiving questions.  Learn more and see the latest updates from the Task Force.  If you have questions regarding this news, please contact your Vorys attorney or a member of our Coronavirus Task Force.